The Debt Management Office (DMO) reduced rates on Nigerian government bonds at its October 2025 primary market auction, even as investors poured in over ₦1.27 trillion in bids. The decision underscores strong investor confidence in naira assets despite falling yields across Nigeria’s fixed-income market.
The DMO had offered ₦260 billion in Federal Government of Nigeria (FGN) bonds across two reopened maturities, five and seven years. However, demand far outstripped supply, reaching ₦1.271 trillion, highlighting sustained appetite for government securities amid growing expectations of monetary easing.
For the five-year paper, the DMO received ₦212.662 billion in subscriptions against ₦130 billion offered. Allotments totaled ₦87.798 billion at a lower marginal rate of 15.832%, down from 16% at the September auction, signaling reduced borrowing costs for the government.
The seven-year bond saw the heaviest investor interest, with subscriptions surging to ₦1.058 trillion, more than eight times the ₦130 billion on offer. The total allotment stood at ₦225.973 billion, with the marginal rate cut to 15.85% from 16.20%, reflecting optimism over a potential interest rate cut in the coming months.
By turning down excess demand and cutting yields, the DMO reinforced its cautious approach to managing Nigeria’s debt costs while maintaining investor engagement in the local bond market. Analysts say the results could shape yield curve expectations heading into year-end auctions.
